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Detection of MSME Sickness and Rehabilitation
What is the overdue period criterion for classifying a Micro or Small Enterprise as Sick under RBI Master Directions?
An MSE is considered sick if principal or interest in any borrowal account has remained overdue for more than 3 months.
What two conditions must both be satisfied for an MSME to be classified as sick?
90-day overdue on any borrowed account and 50% net worth erosion.
What is the net worth erosion threshold that qualifies an MSE as sick under the RBI definition?
An MSE is sick if there is an erosion in net worth due to accumulated cash losses to the extent of 50% or more of its peak net worth in the preceding 2 accounting years.
How many full years of commercial production must an MSME complete before being declared sick?
Two full years of commercial production.
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